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Zhone Expands Market-Leading Storage Area Networking Products

New 10-Port Gigabit Ethernet Module Establishes New Threshold for SAN Capacity

OAKLAND, CA — September 7, 2004 — Zhone Technologies, Inc., (Nasdaq: ZHNE) the first company dedicated to building total-delivery solutions for voice, data and video services worldwide, announced today the addition of a new ten port Gigabit Ethernet line module to its Gigamux family of industry leading products. This new module provides the ability to multiplex up to 10 Gigabit Ethernet channels over a single optical wavelength, maximizing fiber capacity in bandwidth critical Storage Area Network applications.

Unlike some other platforms on the market, Zhone's newly introduced 10 GigE capability is available on existing GigaMux platforms. No new chassis are required, only the addition of a new 10-port Gigabit Ethernet line module. Operators are able to manage and provision new Gigabit Ethernet services because Zhone's GigE solution is completely integrated into the existing GigaMux platform.

GigaMux is a family of metro and regional wavelength division multiplexing (WDM) products designed for high-performance, multi-protocol transport. GigaMux provides a flexible, and cost-effective system based on a "pay-as-you-grow" architecture that allows carriers and enterprises to start small and expand their networks based on bandwidth requirements. Small form-factor pluggable modules (SFP's) allow CapEx savings on initial deployment, and further savings on expansion investment when driven by end-user requirements.

Zhone's Gigamux products when used in SAN applications eliminate the bandwidth bottlenecks and scalability limitations of SCSI-based architectures. By utilizing network servers, Zhone's SAN solutions allow a variety of storage devices (such as tape libraries and disk arrays) to be simultaneously shared among large numbers of users in multiple locations.

Zhone's Gigamux SAN solutions are currently deployed on six continents by some of the world's largest enterprises representing a range of industries including banking, insurance, retail, manufacturing and government. As an integral part of these SAN deployments, Zhone's Gigamux provides fast storage and retrieval of mission-critical data among multiple access points, maintains data archives for disaster recovery and creates a safe physical distance for data warehousing.

"Zhone continues to expand its portfolio of market leading SAN products with the highest density and broadest range of industry protocols including ESCON, Fiber Channel and Gigabit Ethernet", said Manfred Seehagen, General Manager of Central Europe for Zhone. "In cooperation with the world's leading storage solution providers, Zhone has enhanced these standards with to support remote storage at distances of over 1000 miles making Zhone's SAN products the most progressive and beneficial solutions for our customers.

Zhone's GigaMux DWDM and CWDM products have successfully completed interoperability testing and have earned IBM TotalStorage Proven status as well as having successfully completed interoperability testing with EMC Corporation earning E-Lab Tested status for ESCON distance extension. Through interoperability with leading technology partners, Zhone is better able to ensure the many operational, financial and business benefits that optical technology brings to our customers.

About Zhone Technologies, Inc. (Zhone)

Zhone Technologies, Inc. (Nasdaq: ZHNE) is the first company dedicated solely to delivering the full spectrum of next-generation wireline infrastructure equipment. The company was founded by the senior management team that grew telecommunications pioneer Ascend Communications, Inc., from its startup roots to the multi-billion-dollar company acquired by Lucent Technologies (NYSE: LU). Zhone's Single-Line Multi-Service architecture (SLMS™), allows carriers to concurrently deliver voice, new premium data and video services over copper or fiber access lines. Zhone provides carriers with an elegant migration from legacy circuit-based technology to packet based networks while substantially reducing operating costs. With deployments at over 300 carriers including among some of the world's largest networks, Zhone has enabled carriers to reinvent their businesses.

Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change without notice. Copyright 2004 Zhone Technologies, Inc. All rights reserved.

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Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change without notice.